The concept of ‘Trickle-down theory’ is associated with
(A) Welfare economics
(B) Keynesian economics
(C) Classical economics
(D) Supply-side economics
Answer: (D)

In India, the largest source of non-tax revenue is
(A) Interest receipts
(B) Dividends and profits
(C) External grants
(D) Fees and penalties
Answer: (B)

Which of the following is not a qualitative tool of credit control by RBI?
(A) Marginal requirements
(B) Moral suasion
(C) Credit rationing
(D) Repo rate
Answer: (D)

When marginal propensity to consume (MPC) is 0.8, the multiplier is
(A) 2
(B) 4
(C) 5
(D) 8
Answer: (C)

National Rural Employment Guarantee Scheme was renamed after
(A) Mahatma Gandhi
(B) Jawaharlal Nehru
(C) Sardar Patel
(D) Indira Gandhi
Answer: (A)

The term ‘liquidity trap’ is associated with
(A) High inflation and low growth
(B) Very low interest rate and ineffective monetary policy
(C) Excess liquidity in banking system
(D) None of the above
Answer: (B)

Which of the following would not be included in India’s national income?
(A) Commission earned by a broker
(B) Rent received by landlord
(C) Sale of old car
(D) Salary of government employee
Answer: (C)

The investment multiplier is zero when
(A) MPC = 0
(B) MPC = 1
(C) MPS = 0
(D) None of these
Answer: (A)

The currency notes are issued in India under
(A) Minimum Reserve System
(B) Maximum Reserve System
(C) Proportional Reserve System
(D) Fixed Fiduciary System
Answer: (A)

The ‘Law of Diminishing Returns’ applies in the field of
(A) Consumption
(B) Production
(C) Exchange
(D) Distribution
Answer: (B)

‘Poverty Gap’ refers to
(A) Difference between rural and urban poverty
(B) Difference between actual income and poverty line
(C) Unemployment difference
(D) Economic disparity among rich and poor
Answer: (B)

Who determines the methodology for measuring poverty in India?
(A) Ministry of Rural Development
(B) NITI Aayog
(C) Reserve Bank of India
(D) Planning Commission / Expert Committee
Answer: (D)

HDI was first introduced by
(A) Amartya Sen
(B) Adam Smith
(C) Mahbub ul Haq
(D) J. M. Keynes
Answer: (C)

Which Five-Year Plan was called a “Gadgil Yojana”?
(A) Third
(B) Fourth
(C) Fifth
(D) Second
Answer: (B)

In the budget, the deficit which includes revenue deficit and capital expenditure is called
(A) Fiscal Deficit
(B) Budgetary Deficit
(C) Revenue Deficit
(D) Monetized Deficit
Answer: (A)

Which of the following is a non-debt capital receipt?
(A) Disinvestment
(B) Market borrowing
(C) Treasury bills
(D) Ways and Means Advances
Answer: (A)

The term “Twin Balance Sheet Problem” refers to
(A) NPAs and twin budget deficits
(B) Public and private sector loss
(C) Bank and corporate sector stress
(D) Fiscal deficit and current account deficit
Answer: (C)

The concept of ‘Demographic Dividend’ is related to
(A) Aging population
(B) Growing population
(C) Working-age population
(D) Child labor
Answer: (C)

Which of the following is not included in ‘Make in India’ priority sectors?
(A) Automobiles
(B) Defence
(C) Tourism
(D) Education
Answer: (D)

Which of the following is an indirect tax?
(A) Income tax
(B) Wealth tax
(C) Corporate tax
(D) Excise duty
Answer: (D)

The ‘Operation Green’ was launched to address the price volatility of
(A) Fruits
(B) Milk
(C) Tomato, Onion, Potato
(D) Cereals
Answer: (C)

India’s first integrated goods and services tax was implemented on
(A) July 1, 2015
(B) January 1, 2016
(C) July 1, 2017
(D) August 15, 2018
Answer: (C)

What is meant by ‘crowding out’ effect?
(A) Public investment reducing private sector spending
(B) Private investment reducing government spending
(C) Public borrowing reducing private investment
(D) Public subsidies reducing private profits
Answer: (C)

The unemployment type when people are willing to work but are not getting jobs is
(A) Frictional
(B) Structural
(C) Voluntary
(D) Involuntary
Answer: (D)

In economics, “devaluation” refers to
(A) Rise in currency value
(B) Reduction in value of currency by government
(C) Appreciation in exchange rate
(D) None of the above
Answer: (B)

Which of the following index is used to measure consumer price inflation in India?
(A) WPI
(B) CPI-IW
(C) CPI Combined
(D) GDP Deflator
Answer: (C)

Which of the following promotes gender budgeting in India?
(A) Ministry of Finance
(B) NITI Aayog
(C) Ministry of Women and Child Development
(D) RBI
Answer: (C)

A rise in interest rate leads to
(A) Increase in investment
(B) Decrease in savings
(C) Decrease in investment
(D) Rise in consumption
Answer: (C)

Kisan Credit Card scheme was launched in
(A) 1990
(B) 1998
(C) 2001
(D) 2005
Answer: (B)

When GDP is adjusted for inflation, it is known as
(A) Nominal GDP
(B) Real GDP
(C) GDP at market prices
(D) GDP deflator
Answer: (B)

The unemployment seen during off-season in agriculture is
(A) Disguised
(B) Frictional
(C) Seasonal
(D) Structural
Answer: (C)

Which index ranks countries by ease of starting business?
(A) Global Competitiveness Index
(B) Ease of Doing Business Index
(C) Human Capital Index
(D) Business Climate Index
Answer: (B)

Who prepares India’s balance of payments data?
(A) Ministry of Commerce
(B) RBI
(C) NITI Aayog
(D) Ministry of Finance
Answer: (B)

The term ‘Hot Money’ refers to
(A) Tax haven deposits
(B) FDI in infrastructure
(C) FII inflows and outflows
(D) Investment in bullion
Answer: (C)

A reduction in tax rates to boost demand is part of
(A) Supply-side policy
(B) Fiscal contraction
(C) Expansionary fiscal policy
(D) Deflationary monetary policy
Answer: (C)

Pradhan Mantri Awas Yojana focuses on
(A) Rural electrification
(B) Affordable housing
(C) Urban employment
(D) Financial inclusion
Answer: (B)

The base year for CPI inflation is
(A) 2004–05
(B) 2011–12
(C) 2012
(D) 2015
Answer: (C)

A budget is said to be balanced when
(A) Total expenditure = total receipts
(B) Revenue receipts = capital expenditure
(C) Total tax = total subsidy
(D) None of these
Answer: (A)

India is called a mixed economy because
(A) Both agriculture and industry are developed
(B) Public and private sectors coexist
(C) It promotes exports and imports
(D) It has rural and urban sectors
Answer: (B)

A fall in price of substitute good leads to
(A) Increase in demand
(B) Decrease in demand
(C) Increase in supply
(D) No change in demand
Answer: (B)

Gini coefficient measures
(A) Population growth
(B) Employment
(C) Income inequality
(D) Poverty gap
Answer: (C)

The law of demand shows
(A) Inverse relation between price and demand
(B) Positive relation between price and supply
(C) Constant demand with price change
(D) Positive relation between demand and income
Answer: (A)

What does the Engel curve show?
(A) Relationship between demand and price
(B) Relationship between income and demand
(C) Relation between saving and income
(D) Relation between tax and GDP
Answer: (B)

When marginal utility becomes zero, total utility is
(A) Maximum
(B) Minimum
(C) Zero
(D) Constant
Answer: (A)

Which of the following is not a function of RBI?
(A) Issuer of currency
(B) Banker to government
(C) Controller of credit
(D) Collection of taxes
Answer: (D)

Budget is presented in Parliament by
(A) Prime Minister
(B) Finance Minister
(C) RBI Governor
(D) President
Answer: (B)

The Finance Commission is constituted every
(A) 3 years
(B) 5 years
(C) 10 years
(D) Annually
Answer: (B)

The concept of zero-based budgeting was first adopted in India during
(A) 6th Five-Year Plan
(B) 5th Five-Year Plan
(C) 7th Five-Year Plan
(D) 8th Five-Year Plan
Answer: (A)

The institution that manages India’s public debt is
(A) Ministry of Finance
(B) RBI
(C) SEBI
(D) SBI
Answer: (B)

The SEZ Act was passed in
(A) 2002
(B) 2003
(C) 2005
(D) 2006
Answer: (C)